Net Revenues, Income Dip At Morgan Stanley

Editorial Staff

20 April 2023

Morgan Stanley yesterday reported it made net revenues of $14.5 billion for Q1 2023, down from $14.8 billion a year ago. Net income applicable to shareholders was $3 billion, down from $3.7 billion a year before.

At its wealth management business, net revenues rose in Q1 to $6.6 billion from $5.9 billion a year before, it said in a statement yesterday. On the asset management side, revenues were hit by falling asset levels. Net interest income rose as central bank interest rates rose.

Fee-based asset flows decelerated sharply to $22.4 billion in the first quarter from $97.2 billion a year before. Net new assets also fell, at $109.6 billion in Q1, from $142 billion.

“The investments we have made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter.

Equity and fixed Income revenues were strong, although investment banking activity continued to be constrained,” James P Gorman, chairman and chief executive, said.

At the overall group level, provision for credit losses rose to $234 million, up from $57 million – continuing a pattern of banks increasing their provisions this year. Compensation costs rose to $6.41 billion, from $6.274 billion. Non-compensation costs rose to $4.113 billion from $3.882 billion.

Return on equity fell to 12.4 per cent from 14.7 per cent.

The firm had a Common Equity Tier 1 capital ratio of 15.1 per cent.